<SUBMISSION>
<ACCESSION-NUMBER>0001200952-03-000396
<TYPE>DEF 14A
<PUBLIC-DOCUMENT-COUNT>1
<PERIOD>20030428
<FILING-DATE>20030408
<EFFECTIVENESS-DATE>20030408
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>AG BAG INTERNATIONAL LTD
<CIK>0000842289
<ASSIGNED-SIC>3089
<IRS-NUMBER>931143627
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>DEF 14A
<ACT>34
<FILE-NUMBER>000-18259
<FILM-NUMBER>03642872
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>2320 SE AG BAG LN
<CITY>WARRENTON
<STATE>OR
<ZIP>97146
<PHONE>5038611644
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>2320 SE AG BAG LANE
<CITY>WARRENTON
<STATE>OR
<ZIP>97146
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>AB HOLDING GROUP INC
<DATE-CHANGED>19901106
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>ag_proxy030407.txt
<TEXT>
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 10549

                              ____________________



                            SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934



                  Filed by the Registrant                     |X|
                  Filed by a Party other than the Registrant  |_|

                  Check the appropriate box:
                  |_|      Preliminary Proxy Statement
                  |_|      Confidential, for Use of the Commission Only
                           (as permitted by Rule 14a-6(e)(2))
                  |X|      Definitive Proxy Statement
                  |_|      Definitive Additional Materials
                  |_|      Soliciting Material Pursuant toss. 240.14a-11(c)
                           orss. 240.14a-12



                          AG-BAG INTERNATIONAL LIMITED
 ------------------------------------------------------------------------------
                (Name of Registrant as Specified in Its Charter)

 ------------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

        Payment  of  Filing  Fee  (check  the  appropriate  box):
        |X| No  fee  required























<PAGE>
                          AG-BAG INTERNATIONAL LIMITED
                               2320 SE AG-BAG LANE
                             WARRENTON, OREGON 97146


                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                             TO BE HELD JUNE 2, 2003


TO THE STOCKHOLDERS OF AG-BAG INTERNATIONAL LIMITED:

The  Annual   Meeting  of   Stockholders   (the  "Annual   Meeting")  of  Ag-Bag
International  Limited,  a Delaware  corporation (the "Company") will be held at
the offices of the Company, 2320 SE Ag-Bag Lane,  Warrenton,  Oregon, on Monday,
June 2, 2003, at 9:00 A.M. local time, for the following purposes:


1.  Electing  two  directors  to serve for a  three-year  term and  until  their
successors are elected and qualified;

2. Ratifying the appointment of Moss Adams LLP as independent public accountants
for the fiscal year ended December 31, 2003; and

3.  Transacting  such other  business as may properly come before the meeting or
any adjournments thereof.

The Board of Directors  has fixed the close of business on April 14, 2003 as the
record date. Only  stockholders of record as of such date are entitled to notice
of, and to vote at, the Annual  Meeting and any  adjournments  or  postponements
thereof.  A list of stockholders  entitled to vote at the Annual Meeting will be
available for inspection at the offices of the Company.


                                            BY ORDER OF THE BOARD OF DIRECTORS



                                            LouAnn Tucker, Secretary
Warrenton, Oregon
April 28, 2003








 ------------------------------------------------------------------------------
 ALL STOCKHOLDERS ARE CORDIALLY  INVITED TO ATTEND THE ANNUAL MEETING.  WHETHER
 OR NOT YOU  PLAN TO  ATTEND  THE  ANNUAL  MEETING,  PLEASE  MARK  AND SIGN THE
 ENCLOSED  PROXY CARD AND RETURN IT  PROMPTLY  IN THE  ENCLOSED  ENVELOPE.  THE
 GIVING OF SUCH  PROXY  DOES NOT  AFFECT  YOUR RIGHT TO REVOKE IT LATER OR VOTE
 YOUR  SHARES  IN  PERSON IN THE EVENT  THAT YOU  CHOOSE TO ATTEND  THE  ANNUAL
 MEETING.
 ------------------------------------------------------------------------------


                                    Page 1
<PAGE>
                          AG-BAG INTERNATIONAL LIMITED
                              2320 SE AG-BAG LANE
                            WARRENTON, OREGON 97146
                                 (503) 861-1644

                     ______________________________________

                                PROXY STATEMENT
                       FOR ANNUAL MEETING OF STOCKHOLDERS
                           TO BE HELD ON JUNE 2, 2003
                     ______________________________________

 ------------------------------------------------------------------------------
                                  SOLICITATION
 ------------------------------------------------------------------------------

The  accompanying  proxy is  solicited  by the  Board  of  Directors  of  Ag-Bag
International  Limited, a Delaware corporation,  (the "Company"),  in connection
with the Company's Annual Meeting of Stockholders  (the "Annual  Meeting") to be
held at 2320 SE Ag-Bag Lane,  Warrenton,  Oregon 97146 on June 2, 2003,  at 9:00
a.m. local time. Copies of this proxy statement and the accompanying  notice and
proxy are being mailed to the stockholders on or about April 28, 2003.

The Company  will pay the expense of this  solicitation.  The Company  will make
solicitations  primarily  by the  use of  the  mails.  If  necessary  to  obtain
reasonable  representation of stockholders at the annual meeting,  solicitations
made by the Company may also be made by telephone, electronic communications, or
personal  interview.   Regular  employees  of  the  Company,  who  will  not  be
additionally  compensated therefor, if any, will make such further solicitation.
The Company will request brokers,  banks or other persons holding stock in their
names,  or in the names of their  nominees,  to forward  proxy  materials to the
beneficial  owners of such stock or request  authority  for the execution of the
proxies and will  reimburse  brokers or other  persons for their  expenses in so
doing. Your cooperation in promptly  completing,  signing,  dating and returning
the enclosed proxy card will help avoid additional expense.

 ------------------------------------------------------------------------------
                                 VOTING MATTERS
 ------------------------------------------------------------------------------

RECORD DATE INFORMATION
-----------------------
The Board of Directors  has fixed the close of business on April 14, 2003 as the
record date.  Only  stockholders of record at the close of business on April 14,
2003 are entitled to notice of, and to vote at, the Annual Meeting. At the close
of business on that date, 11,956,991 shares of Common Stock, $0.01 par value per
share, were outstanding (the "Outstanding Shares").

QUORUM
------
A quorum of  stockholders  is necessary to hold a valid  meeting.  If at least a
majority of Ag-Bag International stockholders are present in person or by proxy,
a quorum will exist.  When a proxy in the form accompanying this proxy statement
is properly executed and returned,  the shares  represented will be voted at the
meeting in  accordance  with the  instructions  specified  in the  proxy.  If no
instructions


                                    Page 2
<PAGE>
are specified,  the shares will be voted FOR the election of each nominee to the
Board of Directors named in this Proxy Statement and FOR the ratification of the
appointment of Moss Adams LLP as the Company's  independent  public  accountants
and such votes will be counted toward determining a quorum.

VOTE NECESSARY FOR ACTION
-------------------------
Each Outstanding  Share entitles the holder thereof to one vote upon each matter
to be presented at the Annual Meeting. If a quorum is present,  each nominee for
election to the Board of  Directors  will be elected by a plurality of the votes
cast by holders of the  Outstanding  Shares.  The  appointment of Moss Adams LLP
will be ratified if Proposal 2 receives  the  affirmative  vote of a majority of
the Outstanding Shares represented at the Annual Meeting.  Abstentions and other
non-votes will be counted for purposes of determining whether a quorum exists at
the Annual  Meeting,  but will not be counted in calculating a plurality as to a
particular  nominee.  An abstention or non-vote has the effect of a vote against
Proposal 2.

REVOCABILITY OF PROXY
---------------------
Any person giving a proxy in the form  accompanying this proxy statement has the
power to revoke it at any time before its exercise. The stockholder may revoke a
proxy given in response to this  solicitation by (i) delivering a written notice
of revocation,  or later-dated  proxy, to the Secretary of the Company,  or (ii)
attending  the meeting and voting in person.  Attendance  at the Annual  Meeting
will not by itself revoke a proxy.


 ------------------------------------------------------------------------------
                          THE AG-BAG BOARD OF DIRECTORS
 ------------------------------------------------------------------------------

STRUCTURE

The business and affairs of the Company are managed  under the  direction of its
Board of  Directors.  The Company's  Bylaws  provide that the Board of Directors
shall consist of not more than 12 members with the exact number to be determined
by the Board of  Directors.  Members of the Board of Directors are elected for a
term of three years or until their successors are elected.  Currently, the Board
of Directors  has fixed the number of Class I, II, and III  directors at two and
has fixed the number of directors constituting the Board of Directors at six.

The Company has a classified  Board of  Directors  currently  consisting  of six
directors:  two  Class I  directors,  Messrs.  Foster  and  Weber;  two Class II
directors,  Messrs. DeMatteo and Schuette; and two Class III directors,  Messrs.
Inman,  and  Cunningham.  At each  Annual  Meeting,  the members of one class of
directors are elected for a term of three years to succeed those directors whose
terms expire at that Annual Meeting.  The terms of the Class II directors expire
at the 2003 Annual  Meeting.  The Board of  Directors  has  nominated  Arthur P.
Schuette  and James C.  DeMatteo  as Class II  directors  ("Nominees").  Messrs.
Schuette  and DeMatteo  are members of the present  Board of Directors  and have
consented to continue to serve as directors.

If any Nominee  becomes unable to serve prior to the Annual  Meeting,  the proxy
holders will have the discretion to vote for a replacement nominee.



                                     Page 3
<PAGE>
         PROPOSAL 1 -- ELECTION OF DIRECTORS


CLASS II - DIRECTORS UP FOR ELECTION THIS YEAR FOR TERMS EXPIRING IN 2006

         -     ARTHUR P.  SCHUETTE,  63, Vice  President of Sales (since  1991);
               Treasurer  of  the  Company  (1990-1999);   Treasurer  of  Ag-Bag
               Corporation  (1983-1991) (former subsidiary of the Company).  Mr.
               Schuette has been a director of the Company since 1990.

         -     JAMES C. DEMATTEO,  46,  Manager of dairy  business  development,
               Cargill Animal Nutrition Western Business Unit, a nutrition group
               of Cargill,  (since 1999);  Dairy  nutritionist,  Cargill  Animal
               Nutrition  (1994-1999);  Director,  Dairy Vision  Group,  a dairy
               business group of Cargill,  (since 2001);  Member,  Applied Dairy
               Technology Team, a technical and scientific advisory group within
               Cargill Animal  Nutrition,  a nutrition group of Cargill,  (since
               1994).  Mr.  DeMatteo  has been a director of the  Company  since
               2002.

YOUR  BOARD OF  DIRECTORS  UNANIMOUSLY  RECOMMENDS  A VOTE  "FOR"  THE  NOMINEES
PRESENTED IN PROPOSAL 1.

CLASS III - DIRECTORS REMAINING IN OFFICE UNTIL 2004

         -     LARRY R. INMAN,  52,  Chairman of the Board  (1990-2000;  2002 to
               present);  President of the Company  (since  1993);  President of
               Ag-Bag Corporation (1984-1989) (former subsidiary of the Company)
               and  Chairman  (1989-1994).  Mr. Inman has been a director of the
               Company since 1990.

         -     LEMUEL  E.   CUNNINGHAM,   81,  Vice  President  of  the  Company
               (1990-1996);  Owner/Operator  of Post Oaks  Ranch and  Cunningham
               Cattle and Feed Company (since 1958).  Mr.  Cunningham has been a
               director of the Company since 1990.

CLASS I - DIRECTORS REMAINING IN OFFICE UNTIL 2005

         -     MICHAEL W. FOSTER,  62, President of Astoria Pacific  Industries,
               Inc., an investment company,  (since 1989); educator (1976-1996);
               executive  director of Clatsop  Community College  Foundation,  a
               nonprofit  foundation  (since 1999);  advisory board member of US
               Bank Corp.  (since  2002).  Mr. Foster has been a director of the
               Company since 1990.

         -     UDO WEBER,  39,  Managing  director of BAG-Budissa an agriculture
               company,   (since  1994);   Managing   director  of  BAW,  a  bag
               distribution  company  (joint  venture with the  Company)  (since
               1997); Managing director of Ag-Bag Polska, an Ag-Bag distribution
               company (a subsidiary of BAW) (since 1999).  Mr. Weber has been a
               director of the Company since 2002.







                                     Page 4
<PAGE>
BOARD MEETINGS AND COMMITTEES

In 2002, the Board of Directors met four times.  In addition to those  meetings,
directors  attended  meetings of  individual  board  committees.  Each  director
attended  more than 75% of the  aggregate  number of  meetings  of the Board and
committees  during the period for which such  director was a member of the Board
and any such Committee.

Our Board has 3 standing committees.

The AUDIT  COMMITTEE  reviews the  Company's  annual  audit and any  comments or
management  reports  issued in connection  therewith and reports to the Board of
Directors on any matters it believes should be brought to the Board's attention.
It is also  responsible  for reviewing the Company's  conflicts of interest,  if
any, and reviews matters relating to disclosure, corporate practices, regulatory
and financial reporting,  accounting procedures and policies,  and financial and
accounting controls. The Audit Committee also recommends the independent auditor
for  appointment  by the Board and reviews  updates on emerging  accounting  and
auditing issues provided by the independent auditor and by management, to assess
their  potential  impact on the  Company.  All  directors  serving  on the Audit
Committee are  "independent"  as defined in the NASD Marketplace Rule 4200(a)15.
During 2002, the Audit Committee held three meetings.

The  COMPENSATION  COMMITTEE  assists the Board of Directors in  fulfilling  its
responsibilities  in  connection  with the  compensation  of Company  directors,
officers and employees.  It performs this function by recommending standards for
the  Company's  compensation  programs and plans,  including  various  incentive
compensation,  retirement and other benefit plans.  The  Compensation  Committee
members,  along with the Board of Directors,  participated in the  deliberations
concerning  executive  officer  compensation.   During  2002,  the  Compensation
Committee held one meeting.

The EXECUTIVE  COMMITTEE  assists the Board on corporate  governance  issues and
strategic  planning.  The  Executive  Committee  consists of the Chairman of the
Board and one non-management  director. The Executive Committee also acts as the
nominating   committee  and  makes   recommendations   to  the  Board  regarding
appropriate  size and  composition  of the Board.  The Executive  Committee will
consider  director  nominees  from  stockholders  for  election  at  the  annual
stockholders' meeting.  Stockholder  nominations must be in writing and received
by the  Company's  Corporate  Secretary not later than ninety days in advance of
the meeting. During 2002, the Executive Committee held two meetings.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
                                             COMMITTEE MEMBERSHIP
--------------------------------------------------------------------------------------------------------------
                                                               AUDIT          COMPENSATION          EXECUTIVE
------------------------------------------------------ ---------------- ------------------- ------------------
<S>                                                    <C>              <C>                 <C>
Lemuel E. Cunningham (Non-Management Director)                                         |X|
------------------------------------------------------ ---------------- ------------------- ------------------
James C. DeMatteo (Non-Management Director)                        |X|
------------------------------------------------------ ---------------- ------------------- ------------------
Michael W. Foster (Non-Management Director)                *       |X|        *        |X|
------------------------------------------------------ ---------------- ------------------- ------------------
Larry R. Inman                                                                                  *         |X|
------------------------------------------------------ ---------------- ------------------- ------------------
Arthur P. Schuette
------------------------------------------------------ ---------------- ------------------- ------------------
Udo Weber (Non-Management Director)                                |X|                                    |X|
------------------------------------------------------ ---------------- ------------------- ------------------
</TABLE>
*Chairman of Committee

                                     Page 5
<PAGE>
 ------------------------------------------------------------------------------
                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 ------------------------------------------------------------------------------

Currently,  there are 174,000  outstanding shares of Preferred Stock,  Series A,
owned by the  Lemuel E.  Cunningham  Trust and by  members  of Mr.  Cunningham's
family.  The Company  maintains life insurance on the life of Mr.  Cunningham in
the amount of $1,000,000  for the purpose of redeeming the Preferred  Stock at a
price of $4 per share in the event of his death.

The Company  purchases its  Tri-Dura(R)  rolls from a company owned by Steven G.
Ross  ("Supplier")  pursuant to a supply  agreement.  Steven G. Ross is a 15.05%
stockholder  in the  Company  and owner of a  company  which  competes  with the
Company's  Tri-Dura(R)  bags.  The supply  agreement  provides  that the Company
purchase  all of its plastic  rolls,  with  certain  exceptions,  from  Supplier
through at least December 31, 2007.  Thereafter,  either the Company or Supplier
may terminate the Supply  Agreement  upon two years' prior written  notice.  The
Company may purchase  plastic rolls from other  suppliers to the extent Supplier
is unable to supply  plastic  rolls  under the  Supply  Agreement.  The  Company
purchased  all of its  Tri-Dura(R)  rolls  from the  Supplier  during  2002 with
payments to the Supplier exceeding $7 million.

 ------------------------------------------------------------------------------
                             AUDIT COMMITTEE REPORT
 ------------------------------------------------------------------------------

The Audit Committee of Ag-Bag  International  Board of Directors is comprised of
three independent  directors and operates under a written charter adopted by the
Board (see Appendix I).

Management  is  responsible  for the Company's  internal  controls and financial
reporting process. The independent accountants  ("auditors") are responsible for
performing  an  independent  audit  of the  Company's  financial  statements  in
accordance with generally accepted audit standards and issuing a report thereon.
The Audit  Committee's  responsibility  is to monitor these  processes.  In this
regard,  the Audit  Committee  meets with  management  and the  auditors at each
committee  meeting.  The  committee  has the  authority  to conduct or authorize
investigations into any matters within the scope of its responsibilities and the
authority  to retain such  outside  counsel  experts,  and other  advisors as it
determines appropriate to assist it in the conduct of any such investigation. In
addition,  the Audit  Committee  recommends to the Board the  appointment of the
Company's auditors.

In this context,  the Audit Committee has discussed with the Company's  auditors
the  overall  scope and plans for the  independent  audit.  The Audit  Committee
reviewed and discussed the audited  financial  statements  with  management  and
management  represented  to the  Audit  Committee  that  the  Company's  audited
financial  statements  were  prepared  in  accordance  with  generally  accepted
accounting  principles.   Discussions  about  the  Company's  audited  financial
statements  included the  auditors'  judgments  about the quality,  not just the
acceptability of the accounting  principles,  the  reasonableness of significant
judgments and the clarity of disclosures in the financial statements.  The Audit
Committee also  discussed with the auditors other matters  required by Statement
on Auditing Standards No. 61 Communication with Audit Committees,  as amended by
SAS No. 90 Audit Committee Communications. Management and the auditors also made
presentations to the Audit Committee during the year on the applicability of new
accounting  releases,  the  Company's  critical

                                     Page 6
<PAGE>
accounting policies, and the legislative history and substantive requirements of
the Sarbanes-Oxley Act of 2002.

The Company's  auditors provided to the Audit Committee the written  disclosures
required by Independence Standards Board Standard No. 1 Independence Discussions
with  Audit  Committees,   and  the  Audit  Committee  discussed  the  auditors'
independence with management and the auditors. In addition,  the Audit Committee
considered whether other non-audit consulting services provided by the auditors'
firm are compatible with maintaining the auditors' independence.

Based on (i) the Audit Committee's  discussion with management and the auditors,
(ii) the Audit Committee's review of  representations  of management,  and (iii)
the  report  of the  auditors  to  the  Audit  Committee,  the  Audit  Committee
recommended  to the Board that the audited  financial  statements be included in
the Company's  Annual  Report on Form 10-K for the year ended  December 31, 2002
filed with the  Securities  and  Exchange  Commission.  This report shall not be
deemed to be  incorporated  by  reference  into any filing by the Company  under
either the Securities Act of 1933, as amended, or the Securities Exchange Act of
1934,  as  amended,   except  to  the  extent  that  the  Company   specifically
incorporates the same by reference.

                                                     Michael W. Foster, Chairman
                                                     James C. DeMatteo
                                                     Udo Weber


AUDIT FEES,  FINANCIAL  INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION  FEES, AND
ALL OTHER FEES

Fees paid to our auditors' firm were comprised of the following:

--------------------------------------------------------------------------------
  Audit Fees(1)....................................................  $    71,195
  Financial Information Systems Design and Implementation Fees.....  $       -0-
  All other fees(2)................................................  $    29,215

(1)2002 Financial Statement Audit and Quarterly Reviews of Forms 10-Q
(2)Relates  to  services  consisting  primarily  of income  tax return
preparation, planning and consulting, and various other consulting matters.
--------------------------------------------------------------------------------


















                                     Page 7
<PAGE>
 ------------------------------------------------------------------------------
                     SECURITY OWNERSHIP OF BENEFICIAL OWNERS
                             (AS OF MARCH 25, 2003)
 ------------------------------------------------------------------------------

The following  table sets forth  certain  information  regarding the  beneficial
ownership  of the  Common  Stock as of March  25,  2003,  by (i) each  director,
director  nominee and named  executive  officer;  (ii) each person  known to the
Company  to be a  beneficial  owner of more  than 5% of the  outstanding  Common
Stock;  and (iii) all  directors and  executive  officers as a group.  Except as
otherwise  indicated in the notes below, each person whose ownership is reported
has sole  voting  power and sole  dispositive  power as to the  number of shares
shown.
<TABLE>
<CAPTION>
NAME AND ADDRESS                                                        AMOUNT AND NATURE OF                PERCENT OF CLASS
OF BENEFICIAL OWNER                                                     BENEFICIAL OWNERSHIP                  OUTSTANDING
-------------------                                                     --------------------                ----------------
<S>                                                                           <C>                                <C>
Steven G. Ross                                                                1,800,000                          15.05%
2000 West Marshall Dr.
Grand Prairie, TX  75051

Lemuel E. Cunningham                                                          1,392,579            (1)           11.57%
7000 W. Seven Rivers Dr.
Crystal River, FL  34429
Director

Peter Cundhill & Associates (Bermuda) Ltd.                                    1,138,700                          9.52%
Peter Cundhill Holdings (Bermuda) Ltd.
The Peter Cundhill Trust
15 Alton Hill
Southampton SN01
Bermuda

Larry R. Inman                                                                 996,881                           8.34%
2320 SE Ag-Bag Lane
Warrenton, OR  97146
Chairman of the Board, Director, &
President

Michael W. Foster                                                              304,260             (2)           2.53%
1636 Irving St.
Astoria, OR  97103
Director

Arthur P. Schuette                                                             267,959             (3)           2.24%
513 Porters Neck Rd.
Wilmington, NC  28411
Director & Vice President of Sales








                                     Page 8
<PAGE>
NAME AND ADDRESS                                                        AMOUNT AND NATURE OF                PERCENT OF CLASS
OF BENEFICIAL OWNER                                                     BENEFICIAL OWNERSHIP                  OUTSTANDING
-------------------                                                     --------------------                ----------------

Walter L. Jay                                                                  133,297                           1.11%
190 Grant St.
Blair, NE  68008
Vice President of Manufacturing

Michael R. Wallis                                                              44,057                              *
2320 SE Ag-Bag Lane
Warrenton, OR  97146
Chief Financial Officer & Vice President of Finance

Udo Weber                                                                      30,000              (4)             *
Birnenalle 10
OT Kleinbautzen
02694 Malschwitz
Germany
Director

James C. DeMatteo                                                              20,000              (5)             *
9011 Lone Oak Drive
Valley Springs, CA  95252
Director

Michael J. Schoville                                                           82,379              (6)             *
6912 Capital View Ct.
Johnston, IA  50131
Chief Executive Officer

All directors and officers as a group (10 persons)                            3,507,824            (7)           28.81%
</TABLE>
________________________________________________________________________________
* less than 1%

(1)  Includes 1,312,579 shares held by the Lemuel E. Cunningham Living Trust, of
     which Mr.  Cunningham  is the  trustee,  and 80,000  shares  issuable  upon
     exercise  of  options  granted  to Mr.  Cunningham  under the  Non-Employee
     Director Stock Option Plan.

(2)  Includes 5,118 shares owned by Astoria Pacific  Industries,  Inc., of which
     Mr. Foster is the  President  and 80,000  shares  issuable upon exercise of
     options granted under the Non-Employee Director Stock Option Plan.

(3)  Includes 266,979 shares held jointly with Mr. Schuette's wife.

(4)  Includes  10,000  shares of Common Stock  issuable upon exercise of options
     granted under the  Incentive  Stock Option Plan and 20,000 shares of Common
     Stock  issuable  upon exercise of options  granted  under the  Non-Employee
     Director Stock Option Plan.

(5)  Includes  20,000  shares of Common Stock  issuable upon exercise of options
     granted under the Non-Employee Director Stock Option Plan.

(6)  Includes  10,000  shares of Common Stock  issuable upon exercise of options
     granted under the Incentive Stock Option Plan.

(7)  Includes 200,000 shares issuable upon exercise of options granted under the
     Non-Employee  Director Stock Option Plan,  and 20,000 shares  issuable upon
     exercise of options granted under the Incentive Stock Option Plan.

                                     Page 9
<PAGE>
 ------------------------------------------------------------------------------
                                PERFORMANCE GRAPH
 ------------------------------------------------------------------------------

The following  performance  graph compares  cumulative  total return for Company
stockholders over the past five years against the cumulative total return of the
Standard & Poor's 500 Stock Index,  and against the Standard & Poor's  Machinery
Group Index. The graph assumes $100 is invested in Company stock and each of the
other two  indices at the closing  market  quotation  on  December  31, 1997 and
dividends are reinvested.  The stock price performance shown on the graph is not
necessarily indicative of future price performance.

                                 [GRAPH OMITTED]

                     1997      1998       1999       2000      2001       2002
                     ----      ----       ----       ----      ----       ----
Ag-Bag            $ 100.00  $  82.35   $  76.45   $  64.71  $  39.53   $  41.41
S&P 500           $ 100.00  $ 128.58   $ 155.63   $ 141.46  $ 124.66   $  97.12
S&P Mach.         $ 100.00  $  86.34   $ 101.82   $  98.90  $ 106.88   $ 104.50

Although the companies  included in the Standard & Poor's  Machinery Group Index
generally have a larger market  capitalization than the Company,  such companies
are  believed to provide the closest peer group  representation  with respect to
the industry served by the Company.

This performance  graph shall not be deemed to be incorporated by reference into
any filing by the Company under either the  Securities  Act of 1933, as amended,
or the  Securities  Exchange Act of 1934, as amended,  except to the extent that
the Company specifically incorporates the same by reference.





























                                    Page 10
<PAGE>
 ------------------------------------------------------------------------------
                       BOARD COMPENSATION COMMITTEE REPORT
                            ON EXECUTIVE COMPENSATION
 ------------------------------------------------------------------------------

The underlying objectives of the Company's  compensation strategy are to attract
and retain the best possible  executive  talent, to motivate those executives to
achieve optimum  operating  performance  for the Company,  to link executive and
stockholder  interests through  equity-based plans and to provide a compensation
package that recognizes  individual  contributions  as well as overall  business
results.  There are three  components to the Company's  executive  compensation:
base salary,  long-term  incentives in the form of stock options,  and incentive
(bonus) payments.

Base Salary.  Base salary for each executive officer,  other than for Michael J.
Schoville and Larry R. Inman,  was  subjectively  determined by an assessment of
his  or  her   sustained   performance,   advancement   potential,   experience,
responsibility,  scope and  complexity  of the position,  and current  salary in
relation to salary levels for comparable positions in the industry, based on the
Company's general awareness of such salary levels.

Long-Term  Incentives.  Stock  options  are  periodically  granted  to the Chief
Executive  Officer and other executive  officers to encourage  management of the
Company from the perspective of an owner with an equity interest in the Company.
Vesting is used to  encourage  key  employees  to  continue in the employ of the
Company.

Annual Incentives. The Company's executive officers receive an annual bonus from
the Company under their employment agreements. There were no bonus payments made
in the fiscal year ended December 31, 2002.

Chief Executive Officer. Mr. Schoville's compensation is based on his employment
arrangement  with the Company,  which provides for a base salary and has a bonus
provision of 2.5% of the net income of the Company. Mr. Schoville's compensation
as set forth in his  employment  arrangement  is  derived  from the value of his
industry expertise and the compensation of comparable industry executives.

The Company does not have any "Excessive  Employee  Remuneration"  as defined in
section 162(m) of the Internal Revenue Code.

This report shall not be deemed to be  incorporated by reference into any filing
by the Company  under  either the  Securities  Act of 1933,  as amended,  or the
Securities  Exchange  Act of 1934,  as  amended,  except to the extent  that the
Company specifically incorporates the same by reference.

                                        Michael W. Foster, Chairman
                                        Lemuel E. Cunningham











                                    Page 11
<PAGE>
 ------------------------------------------------------------------------------
                             EXECUTIVE COMPENSATION
 ------------------------------------------------------------------------------

The following  table sets forth certain  information for each of the years ended
December 31, 2002, 2001 and 2000, regarding  compensation accrued or paid by the
Company to (1) the Company's  Chief  Executive  Officer,  and (2) each executive
officer  of the  Company  who  accrued  or was paid  compensation  in  excess of
$100,000 in the year ended December 31, 2002 (the "Named Executive Officers"):
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
                                    SUMMARY COMPENSATION TABLE
                               -------------------------------------------------------------------------------
                                    ANNUAL COMPENSATION                  LONG TERM COMPENSATION
---------------------------- ------- ----------- -------- ------------- ----------- ------------ -------------
                                                           OTHER ANNUAL  RESTRICTED   SECURITIES    ALL OTHER
NAME AND PRINCIPAL POSITION             SALARY     BONUS   COMPENSATION    STOCK      UNDERLYING  COMPENSATION
                               YEAR       ($)       ($)        ($)       AWARDS ($)  OPTIONS (#)       ($)
---------------------------- ------- ----------- -------- ------------- ----------- ------------ -------------
<S>                            <C>      <C>       <C>      <C>           <C>         <C>          <C>
Michael J. Schoville,          2002     91,667       -          -            -          30,000        810 (4)
CEO                            2001        -         -          -            -            -             -
                               2000        -         -          -            -            -             -
---------------------------- ------- ----------- -------- ------------- ----------- ------------ -------------
Larry R. Inman,                2002     108,000      -      14,400 (1)       -            -             -
President                      2001     108,000   11,576    14,400 (1)       -            -             -
                               2000     108,000   13,700    14,400 (1)       -            -         3,474 (2)
---------------------------- ------- ----------- -------- ------------- ----------- ------------ -------------
Michael R. Wallis,             2002     90,000       -      4,800 (3)        -            -             -
CFO & VP of Finance            2001     90,000    11,576    4,800 (3)        -            -             -
                               2000     88,500    13,700    4,800 (3)        -            -         4,764 (2)
---------------------------- ------- ----------- -------- ------------- ----------- ------------ -------------
Walter L. Jay,                 2002     90,000       -      5,400 (3)        -            -             -
VP of Mfg.                     2001     90,000    11,576    5,400 (3)        -            -             -
                               2000     88,500    13,700    5,400 (3)        -            -         4,752 (2)
---------------------------- ------- ----------- -------- ------------- ----------- ------------ -------------
</TABLE>

(1)  Includes a $4,800 automobile  expense  allowance and a $9,600  farm-related
     expense allowance.
(2)  Constitutes  matching cash contributions by the Company under the Company's
     401(k) plan.
(3)  Automobile expense allowance.
(4)  Dollar  value  of  term  life  insurance  premium  paid  on  behalf  of Mr.
     Schoville.

30,000 options were granted to the Company's chief executive  officer during the
last fiscal year. No stock appreciation  rights were granted to, or exercised by
the Company's executive officers during the last fiscal year.








                                    Page 12
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                                       OPTION GRANTS IN 2002
----------------------------------------------------------------------------------
                                             INDIVIDUAL GRANTS
----------------------------------------------------------------------------------
                                        % OF TOTAL
                          NUMBER OF      OPTIONS                                      POTENTIAL REALIZABLE VALUE
                          SECURITIES    GRANTED TO                                     AT ASSUMED ANNUAL RATES
                          UNDERLYING    EMPLOYEES       EXERCISE                     OF STOCK PRICE APPRECIATION
                           OPTIONS      IN FISCAL        PRICE        EXPIRATION         FOR OPTION TERM (2)
         NAME          GRANTED (#) (1)  YEAR 2002   PER SHARE ($/SH)     DATE     ------------------------------------
                                                                                         5%               10%
----------------------------------------------------------------------------------------------------------------------
<S>                         <C>            <C>           <C>           <C>            <C>               <C>
Michael J. Schoville        30,000         100%          $0.25         1/22/07        $2,100            $4,500
----------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)   Granted  under  Incentive  Stock Option Plan.  Options vest at the rate of
      one-third per year over the three years following the grant.

(2)   The  dollar  amount  under  this  column  reflect  the 5% and 10% rates of
      appreciation prescribed by the Securities and Exchange Commission.  The 5%
      and 10% rates of appreciation would result in per share prices of $.32 and
      $.40, respectively.
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
                              AGGREGATED FISCAL YEAR-END OPTION/SAR EXERCISES AND VALUES

                                                    -------------------------------------------------------------------
                                                      NUMBER OF SECURITIES UNDERLYING   VALUE OF UNEXERCISED IN-THE-
----------------------------------------------------   UNEXERCISED OPTIONS/SARS AT         MONEY OPTIONS/SARS AT
                      SHARES ACQUIRED      VALUE           DECEMBER 31,2002 (#)             DECEMBER 31,2002 ($)
        NAME          ON EXERCISE (#)  REALIZED ($)     (EXERCISABLE/UNEXERCISABLE)      (EXERCISABLE/UNEXERCISABLE)
-----------------------------------------------------------------------------------------------------------------------
<S>                          <C>             <C>               <C>                            <C>
Michael J. Schoville         0               0                 10,000/20,000                  $2,200/$4,400 (1)
-----------------------------------------------------------------------------------------------------------------------
Larry R. Inman               0               0                      0/0                             $0/$0
-----------------------------------------------------------------------------------------------------------------------
Michael R. Wallis            0               0                      0/0                             $0/$0
-----------------------------------------------------------------------------------------------------------------------
Walter L. Jay                0               0                      0/0                             $0/$0
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  Calculated  based on the closing market price of the Company's Common Stock
     on December  31,  2002 at $.22 per share as  reported  on the OTC  Bulletin
     Board.



                                    Page 13
<PAGE>
DIRECTOR COMPENSATION

Of our current Board members,  Mr. Inman and Schuette are salaried  employees of
the  Company.  Board  members  that are not  salaried  employees  of the Company
receive  separate  compensation for Board service.  For 2003, that  compensation
includes:
--------------------------------------------------------------------------------
ATTENDANCE FEES:                    $1,000 for each in-person Board meeting
                                    $  500 for each Board committee meeting
                                    Expenses related to attendance
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
STOCK OPTIONS:                      Per Non-Employee Director Stock Option Plan*
--------------------------------------------------------------------------------
*Pursuant to the Company's  Non-Employee  Director Stock Option Plan, adopted in
1996, each  non-employee  director receives an initial option to purchase 50,000
shares of the Company's Common Stock, ("Common Stock"),  which vest over a three
year  period at the rate of 40% after  six  months,  40% after two years and 20%
after  three  years.  At each  annual  meeting,  directors  who  have  served  a
three-year  term receive an annual  option to purchase  10,000  shares of Common
Stock  exercisable  six months after the grant date.  The exercise price for the
options granted to  non-employee  directors is equal to the fair market value of
the  Common  Stock on the date of grant.  A total of 450,000  options  have been
granted under the Non-Employee  Director Stock Option Plan, 390,000 of which are
fully vested at December 31, 2002.

EMPLOYMENT AGREEMENTS

The Company has employment agreements with executive officers, Messrs Inman, Jay
and Wallis and Mrs. Tucker,  which are automatically  renewed on a yearly basis,
unless  terminated by the death or disability of the employee,  or upon at least
six months  written  notification  by either party.  The  employment  agreements
provide for base  compensation,  bonus  compensation  and  participation  in the
employee benefit plans offered by the Company.

On April 11, 2000, the Company  entered into Change of Control  Agreements  with
executive officers,  Messrs Inman, Jay, Wallis and Schuette, and Mrs. Tucker and
key personnel. These agreements provide for payments to the executive officer or
key employee of the Company,  of one year's  annual base salary,  and a bonus of
$5,000 for each year of Company  service in excess of five years, in addition to
outplacement  services and continued Company employee benefit coverage for a one
year period,  in the event that such officer is terminated  without cause within
the period governed by the agreement.

COMPENSATION  COMMITTEE  INTERLOCKS AND INSIDER  PARTICIPATION  IN  COMPENSATION
DECISIONS

Lemuel E. Cunningham,  who served on the Compensation  Committee of the board of
directors of the Company  during 2002,  was a Vice President of the Company from
1990-1996.








                                    Page 14
<PAGE>
         PROPOSAL 2 -- RATIFICATION OF THE APPOINTMENT OF INDEPENDENT PUBLIC
         ACCOUNTANTS

The Board of Directors  recommends that the stockholders  ratify the appointment
of Moss Adams LLP as  independent  public  accountants  to examine the financial
statements  of the Company for the fiscal year ending  December 31, 2003. In the
event that  ratification  of this  selection  of auditors  is not  approved by a
majority of the Outstanding  Shares voting thereon,  management and the Board of
Directors will review their future selection of auditors.  A  representative  of
Moss Adams LLP will be present at the Annual  Meeting,  will have an opportunity
to make a  statement  if he or she  desires to do so, and will be  available  to
respond to appropriate questions from stockholders.

YOUR BOARD OF DIRECTORS UNANIMOUSLY  RECOMMENDS A VOTE "FOR" THE RATIFICATION OF
THE  APPOINTMENT  OF MOSS ADAMS LLP AS  INDEPENDENT  PUBLIC  ACCOUNTANTS  OF THE
COMPANY.

 ------------------------------------------------------------------------------
                                  OTHER MATTERS
 ------------------------------------------------------------------------------

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities  Exchange Act of 1934, as amended (the "Exchange
Act"),  requires that the Company's officers,  directors or persons who own more
than 10% of the  Common  Stock of the  Company  file  with  the  Securities  and
Exchange Commission (the "SEC") initial reports of beneficial  ownership on Form
3 and  reports of  changes in  beneficial  ownership  of Common  Stock and other
equity  securities of the Company on Form 4 and Form 5. Officers,  directors and
holders of more than 10% of the Common Stock are required by SEC  regulations to
furnish to the Company copies of all Section 16(a) reports that they file. Based
solely on a review of the copies of such  reports  furnished  to the Company and
written representations with respect to the fiscal year ended December 31, 2002,
all forms were filed on a timely basis.

STOCKHOLDER PROPOSALS FOR THE 2004 ANNUAL MEETING

Any stockholder  proposals to be considered for inclusion in the proxy materials
for the  Company's  2004  Annual  Meeting  must  be  received  at the  principal
executive offices of the Company not later than December 30, 2003.

The proxy holders will have discretionary authority to vote on any proposal that
is presented at the 2004 Annual Meeting and not contained in the Company's proxy
materials  unless the Company  receives notice of such proposal at its principal
office no later than March 14, 2004.













                                    Page 15
<PAGE>
MATTERS RAISED AT THE MEETING NOT INCLUDED IN THIS STATEMENT

As of the date of this Proxy  Statement,  the  Company is not aware of any other
business  to be  presented  at the Annual  Meeting.  However,  if other  matters
properly  come  before the  meeting,  the proxy  holders  will vote the  proxies
received in accordance with their best judgment on such matters.


THE COMPANY'S 2002 ANNUAL REPORT TO STOCKHOLDERS  ACCOMPANIES  THESE  MATERIALS.
COPIES OF THE  COMPANY'S  ANNUAL  REPORT ON FORM 10-K FOR THE FISCAL  YEAR ENDED
DECEMBER 31, 2002 MAY BE OBTAINED FROM THE COMPANY  WITHOUT  CHARGE UPON WRITTEN
REQUEST TO THE  COMPANY.  REQUESTS  SHOULD BE  DIRECTED  TO THE CHIEF  FINANCIAL
OFFICER, AG-BAG INTERNATIONAL LIMITED, 2320 SE AG-BAG LANE, WARRENTON, OR 97146.


                                              BY ORDER OF THE BOARD OF DIRECTORS


                                              LouAnn Tucker, Secretary







































                                    Page 16
<PAGE>
                          AG-BAG INTERNATIONAL LIMITED
                               2320 SE AG-BAG LANE
                               WARRENTON, OR 97146

                                 APRIL 28, 2003

Dear Stockholder:

You are cordially invited to attend the 2003 Annual Meeting of Stockholders (the
"Annual Meeting") of Ag-Bag International Limited (the "Company").

                  Place:   Company Headquarters
                           2320 SE Ag-Bag Lane
                           Warrenton, OR  97146

                  Date:    Monday, June 2, 2003

                  Time:    9:00 a.m. local time

The Notice of the Annual Meeting and Proxy Statement  accompany this letter. The
Proxy  Statement  describes  the  business to be  transacted  at the meeting and
provides other information concerning the Company.

The principal  business to be transacted at the Annual  Meeting will be election
of  directors  and  the   ratification  of  the  appointment  of  the  Company's
independent  public  accountants.   The  Board  of  Directors   recommends  that
stockholders  vote for election of the nominated  directors and for ratification
of the appointment of the Company's independent public accountants.

We know that many of our  stockholders  will be  unable  to  attend  the  Annual
Meeting.  Proxies  are  therefore  solicited  so that  each  stockholder  has an
opportunity  to vote on all  matters  that  are  scheduled  to come  before  the
meeting.  Whether or not you plan to attend the Annual Meeting, we hope that you
will have your stock represented by marking,  signing, dating and returning your
proxy card in the  enclosed  envelope  as soon as  possible.  Your stock will be
voted in accordance with the instructions you have given in your proxy card. You
may,  of course,  attend the Annual  Meeting and vote in person even if you have
previously returned your proxy card.

                                                     Sincerely,

                                                     Lou Ann Tucker, Secretary




 ------------------------------------------------------------------------------
                                    IMPORTANT

A proxy card is enclosed  herewith.  All  stockholders are urged to complete and
mail the proxy card promptly. The enclosed envelope for return of the proxy card
requires no postage. Any stockholder attending the Annual Meeting may personally
vote on all matters that are considered, in which event the signed proxy will be
revoked.

                    IT IS IMPORTANT THAT YOUR STOCK BE VOTED
 ------------------------------------------------------------------------------


<PAGE>
                          AG-BAG INTERNATIONAL LIMITED
                         ANNUAL MEETING -- JUNE 2, 2003
            THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The  undersigned  hereby  appoints  Larry Inman and Lou Ann Tucker,  and each of
them,  proxies,  with power of substitution to vote on behalf of the undersigned
all shares that the undersigned may be entitled to vote at the annual meeting of
stockholders of Ag-Bag International  Limited to be held at 2320 SE Ag-Bag Lane,
Warrenton,  Oregon,  on June  2,  2003,  at  9:00  A.M.  local  time,  or at any
adjournment or adjournments  thereof, with all powers that the undersigned would
possess if personally present, with respect to the following:

         PROPOSAL  1 - ELECTION  OF CLASS II  DIRECTORS  - PROPOSED  BY BOARD OF
         DIRECTORS

         |_|   FOR all nominees  listed below  (except as marked to the contrary
               below)  or, if any  named  nominee  is  unable  to  serve,  for a
               substitute nominee.


         |_|   WITHHOLD AUTHORITY to vote for all nominees listed below.

               ARTHUR P. SCHUETTE       JAMES C. DEMATTEO

(INSTRUCTION:  To withhold authority to vote for any individual  nominee,  write
that nominee's name in the space provided below.)

________________________     _________________________

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES LISTED ABOVE.


         PROPOSAL 2 - RATIFICATION OF INDEPENDENT  PUBLIC ACCOUNTANTS - PROPOSED
         BY BOARD OF DIRECTORS

Ratify the  selection  of Moss  Adams LLP as the  Company's  independent  public
accountants for the fiscal year ending December 31, 2003.

     |_|      FOR               |_|      AGAINST            |_|     ABSTAIN

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ABOVE PROPOSAL.

THE SHARES  REPRESENTED  BY THIS PROXY WHEN  PROPERLY  EXECUTED WILL BE VOTED AS
SPECIFIED.  IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL 1
AND PROPOSAL 2. THE PROXIES ARE  AUTHORIZED  TO VOTE IN THEIR  DISCRETION  AS TO
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING.

                           Date: _______________________, 2003.


                           _____________________________________________________
                           Stockholder's Signature

                           _____________________________________________________
                           Stockholder's Signature (if shares are held jointly)

                           Please  date and sign  exactly  as your name  appears
                           hereon,  including designation as executor,  trustee,
                           etc.,  if  applicable.  When shares are held jointly,
                           each  joint  owner  should  sign.  If a  corporation,
                           please sign in full  corporate  name by the president
                           or other  authorized  officer.  If a  partnership  or
                           other entity, please sign in such entity's name by an
                           authorized person.

PLEASE MARK,  DATE,  SIGN AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
<PAGE>
                                   Appendix I

                  Ag-Bag International Audit Committee Charter


Audit Committee's Role and Independence

The audit  committee of the board of directors  assists the board in  fulfilling
its responsibility for oversight of the quality and integrity of the accounting,
auditing and  reporting  practices of the  corporation  and such other duties as
directed by the board. The membership of the committee shall consist of at least
three  directors who are  generally  knowledgeable  in financial and  management
expertise. Each member shall be free of any relationship that, in the opinion of
the board,  would  interfere with his or her individual  exercise of independent
judgement.  The  committee is expected to maintain  free and open  communication
(including  private  executive  sessions at least annually) with the independent
accountants,  the internal  auditors and the management of the  corporation.  In
discharging  this oversight  role, the committee is empowered to investigate any
matter  brought to its attention,  with full power to retain outside  counsel or
other  experts for this  purpose.  This charter shall be reviewed and updated as
needed.

Responsibilities

The audit committee's primary responsibilities include:

o        Primary  input into the  recommendation  to the board for the selection
         and retention of the  independent  accountant that audits the financial
         statements  of the  corporation.  In the process,  the  committee  will
         discuss and consider the auditor's written affirmation that the auditor
         is in fact independent,  will discuss the nature and rigor of the audit
         process,  receive  and  review  all  reports,  and will  provide to the
         independent  accountant full access to the committee (and the board) to
         report on any and all appropriate matters.

o        Provision of guidance and oversight to the internal  audit  function of
         the corporation, including review of the organization plans and results
         of such activity.

o        Review of  financial  statements  (including  quarterly  reports)  with
         management and the independent auditor.

o        Discussion with management and the auditors of the quality and adequacy
         of the corporation's internal controls.

o        Discussion  with  management  of  the  status  of  pending  litigation,
         taxation  matters,  and  other  areas of  oversight  to the  legal  and
         compliance areas as may be appropriate.

o        Reporting on audit committee  activities to the full board and issuance
         annually  of  a  summary  report   (including   appropriate   oversight
         conclusions) suitable for submission to the shareholders.






                                    Page 17

</TEXT>
</DOCUMENT>
</SUBMISSION>
